First Capital Trust Deeds provided the 36-month luxury private money loan at 7.99% to complete the acquisition of this investment property in La Jolla. Before closing on the property, the borrower mapped out a very clear exit strategy of refinancing the loan into a jumbo bank loan after filing income taxes at the beginning of the new year, using the rental income generated by this home to cover the debt service requirements.
The end result of this loan looks pretty simple, but it actually took more than a year to complete as the buyer needed to sell a couple of luxury investment properties through a 1031 Exchange in order to close the acquisition of this property. The client’s agent reached out to FCTD along with another mortgage broker to find the best financing terms for their client. Fortunately, our financing package on the Mt. Soledad home proved to be the most attractive for the borrower and we were able to close the loan.
The trust deed investors who made the loan absolutely loved the property. They liked the positive cash flow even with the private money financing at 7.99%, the protective equity of nearly $1,500,000, and the borrower’s real estate investment track record. Therefore they were able to take a lower interest rate at 7.99% instead of the usual private money trust deed investments yielding 9.00% to 11.00%.
36-Month Luxury Private Money Loan Terms:
- $3,150,000 Loan Amount
- 7.99% Interest-Only
- $20,951/Month Payment
- 36-Month Term
- 6-Month Prepayment Penalty